BY GREG GARDNER

DETROIT FREE PRESS BUSINESS WRITER

Chrysler defied the general slowdown in new vehicle sales in May, reporting a 10% increase from a year earlier, when it was preparing to launch the 2011 Jeep Grand Cherokee.

Sales of the revamped Chrysler 200 more than doubled the year-earlier performance of the Chrysler Sebring it replaced with 7,096 units sold in May, but sales of its Town & Country minivan tumbled 51% and sales of the redesigned 300 full-size sedan fell 28% to 2,539.

Chrysler’s Jeep brand drove the Auburn Hills’ automaker’s overall gain with a 55% increase from May 2010, as sales of the Grand Cherokee nearly tripled to 9,484.

For the industry, however, May was a lackluster month as higher gas prices and a shortage of many Japanese brand models led many consumers to defer purchases.

General Motors’ sales fell 1.2% in May as it sold fewer vehicles to rental car fleets. Ford’s sales slipped 0.1% in a month that had two fewer selling days than May 2010.

GM said sales to individual customers increased 9% from a year earlier. Ford said its retail sales increased 4%.

Shortages of vehicles out of earthquake-stricken Japan and higher sticker prices added to consumers’ hesitation from gas prices that remain at least $1 a gallon higher than they were a year ago.

“The consumer was sitting back, trying to decide if the short-term was really the time to buy and sort of waiting to see what would happen,” Johnson said. He predicted demand will fall even farther in June and even into July.

Japanese automakers suffered the most as certain models, including some that are assembled in the U.S. or Canada, were in limited supply because key electrical components were not available in sufficient quantities in the aftermath of the March 11 earthquake and tsunami.

Toyota sales plummeted 27.9% from May 2010, with its Lexus luxury brand posting a 40% drop.

“As expected, May was an especially challenging month due mainly to uncertainties about our production forecast. But thanks to the efforts of our manufacturing team members and suppliers, we are ramping up much faster than expected,” said Bob Carter, Toyota Division group vice president. “Beginning this month, Japan production will be at 90% of normal levels, and eight of 12 North American-built vehicles will be at 100%.”

Honda’s sales fell 16.1%, as sales of its two best-selling models, Civic and Accord, fell 30.2% and 34.5%, respectively.

“We are confident that sales will rebound as our North American plants reach 100% production capacity for most models in August,” said John Mendel, American Honda’s executive vice president of sales.

Nissan reported a 9.1% drop in its May sales, with its core Nissan division down 7.8% and its Infiniti luxury brand experienced a 21% sales decline.

“Customers continue to demand better fuel economy and our commitment to produce high-quality, fuel-efficient vehicles is paying off,” said Don Johnson, GM vice president, U.S. sales operations.

Ford U.S. sales chief Ken Czubay echoed that Ford is seeing stronger interest in its most fuel-efficient models. Sales of the Fiesta subcompact and the new Focus compact totaled 29,423, the best month for Ford’s small car sales since May 2008.

During the month, GM sold 13% more passenger cars than a year earlier. Retail sales of passenger cars rose 32%, led by the Chevrolet Cruze, sales of which were up 150% from the Chevrolet Cobalt it replaced.

Americans likely bought new cars and truck last month at an annual rate of between 11.5 million and 12.2 million vehicles, forecasters said. That would be down from a SAAR of between 13.1 million and 13.5 million in February, March and April.

Sales fell partially because automakers are raising prices. The average transaction price hit record highs for the seven largest manufacturers in the U.S., with GM and Ford posting the highest average prices at $33,883 and $32,885, respectively.

The annual rate is how many vehicles the industry would sell in a year if demand remained constant over 12 months.

Despite the expected monthly sales declines in May, GM, Chrysler and Hyundai-Kia likely gained market share, but that largely reflected lower production by Toyota and Honda. Those Japanese automakers are expected to begin boosting output both in Japan and in North America later this year.

Shortages of Japanese vehicles were expected to help the Chevrolet Cruze compact and the Equinox small crossover top their segments in sales to individual customers, Johnson said.

According to TrueCar.com, GM spent an average of $2,714 per vehicle on incentives in May, down 27.2% from May of last year, and the company’s lowest level since GM’s bankruptcy exit almost two years ago, but still finished higher than two automakers who had virtually no incentives because of inventory shortages. GM measures incentives as a percentage of the average price customers pay for vehicles.

Ford’s passenger car sales increased 8.8% from a year earlier to 75,331. Sport-utility sales edged up 2.8% to 54,727. Truck sales dropped 11.1%.

The new Explorer’s sales more than doubled from May 2010, when the vehicle’s more truck-like predecessor was on the market. But sales of its highest-volume vehicle, the F-Series pickup truck, fell 15%, and May sales of the Lincoln luxury brand, which is in the midst of a dealer-consolidation initiative, fell 4.6% from a year earlier to 7,399.

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